Godrej Properties Q1 net up at Rs 39cr; mulls rights issue

Godrej Properties, which today reported more than two-fold jump in consolidated net profit at Rs 39.47 crore in the first quarter, said it is likely to raise Rs 700 crore through a rights issue within this fiscal.

"The proposed rights issue is going as per the plan. We hope to raise the money through rights issue within this financial year. The funds raised through the issue will be used to create balance funding for future projects," Godrej Properties Managing Director and CEO Pirojsha Godrej told reporters here. The company's debt, currently at Rs 1,600 crore, is manageable and is likely to decline after the rights issue, he said. Godrej Properties' debt equity ratio currently is 1:1.

Meanwhile, the Godrej Group's real estate arm reported consolidated net profit at Rs 39.47 crore in the quarter ended June 30, up from Rs 17.15 crore in the same period last year, on account of sharp rise in other income. "Godrej Properties has delivered strong year-on-year earnings and bookings growth despite adverse market conditions. The jump is net profit is mainly due to Rs 40 crore capital infusion by private equity fund and sharp rise in other income," he added.

Other income jumped to Rs 42.71 crore during the quarter from Rs 6.69 crore in the year-ago period. The company earned a profit of Rs 40 crore on account of dilution of 49 per cent stake by its subsidiary in a project. Total income from operations fell to Rs 201.57 crore during the April-June period of FY14 from Rs 226.10 crore in the corresponding period of previous fiscal.

Asked about launch of the realty firm's premium residential township in Panvel, Godrej said the project is still on the drawing board and is likely to take off in the next financial year. The realtor has entered into a joint venture agreement for the high-end township, which will come up on approximately 110 acres of land in Panvel, Navi Mumbai. Further, Godrej said the company has bought back 49 per cent stakes from HDFC Bank in its projects located in Chandigarh and Bangalore.